The concept of buying goods on “credit”, or a promise for future payment, is not new. Today, nearly everyone in the industrial world is familiar with receiving bills for goods and services. Every month, like clockwork, millions of consumers receive bills for goods and services. For convenience, the term “consumer” is used throughout this document to represent both a typical person who consumes goods and services as well as a business that consumes goods and services.
At the end of each billing cycle, a biller generates a bill or statement for each consumer account having a positive or negative account balance, or having transactions that yielded a zero balance. As used herein, a “biller” is any party that originates billing statements for goods or services rendered to the consumer. Examples of billers are utilities, government, merchants, and intermediate billing services such as banks. The billing statement is typically customized according to the biller's preferences. For example, it is common for billing statements to be printed on colored paper, display the biller's logo, provide a billing summary, and show itemized transactions. This information is organized in a custom format that is unique to and controlled by the biller.
The biller also creates remittance information that associates the consumer account with the bill and any payment toward the bill. The remittance information is typically in the form of a detachable stub or coupon that the consumer detaches from the billing statement and returns along with the payment. This remittance stub is also customized according to the biller's preferences.
Recently, electronic bill presentment and payment (EBPP) systems have been developed to automate this process of bill delivery and payment. Companies such as Microsoft, Checkfree and Visa, Inc. are developing products in this space, the result of which heretofore has been an associated number of proprietary, closed EBPP systems. One such system is described in U.S. Pat. No. 5,465,206, entitled “Electronic Bill Pay System,” which issued Nov. 7, 1995 and is assigned to Visa International.
The Visa bill payment system permits bills to be sent by billers to consumers via U.S. mail or electronically via email. Unfortunately, the Visa system suffers from a number of drawbacks. First, the email message containing the bill must conform to requirements imposed by Visa. This requirement stems from the need to route remittance information back to the biller through the VisaNet® network (one of the four Automated Clearing Houses (ACH) used by financial institutions to clear transactions between accounts). Thus, the biller has little or no control over the format concerning how the bill is presented to the customer, but must instead accommodate a format compatible with this network. Second, the Visa system is designed to support the presentment of “bills” from corporate billers, and would not accommodate the myriad of financial transactions conducted among and between consumers. Third, these prior art EBPP systems (e.g., Visa, Checkfree, etc.) have not be designed for interoperability. Currently, there is no solution available to integrate all of the users from these disparate EBPP systems into a common, ubiquitous network.
These limitations are significant in a number of respects, the most notable of which are the cost and responsiveness of such prior art electronic financial systems. The technical limitations of presenting a bill through the Visa network, for example, effectively requires the biller to have a technical staff that is competent to structure the bills in the required format. The cost of supporting such a staff is prohibitively expensive to all but large corporations.
From a practical standpoint, the technical limitations associated with preparing bills for presentment and payment via the Visa system requires a monthly batch billing cycle. However, many of today's fastest-growing business opportunities that would greatly benefit from such an electronic financial network want to process financial requests instantaneously, or nearly so. The electronic commerce (eCommerce) marketplace presents a fine example. Today, eCommerce relies heavily on the use of the established credit card clearing house system, the cash-on-delivery (COD) service of carrier services, or an escrow service—all of which represent expensive solutions to the technical limitations of the Visa system. Auction houses, for example, typically utilize an escrow service to handle the commercial transaction between two individuals, protecting each of the buyer and the seller from the fraud of the other.
Recently, communication protocols have been introduced, i.e., the Open Financial Exchange (OFX) and, more recently the Internet Financial Exchange (IFX), as a means through which the disparate, proprietary financial networks can communicate with one another. Although these protocols provide a foundation for a solution to the aggregation problem, they are not, in and of themselves a solution. Indeed, a solution to integrate the otherwise disparate networks is not trivial in that a comprehensive system of checks and balances would be required to insure that all of the disparate systems accurately reflect the state of all accounts (billers and consumers alike).
Thus, a ubiquitous network is required which solves the problems commonly associated with the prior art financial networks. One such solution is provided below.